Tristar Production Company began operations on September 1, 2018. Listed below a
ID: 2575246 • Letter: T
Question
Tristar Production Company began operations on September 1, 2018. Listed below are a number of transactions that occurred during its first four months of operations. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $290,000 in cash for the property. According to appraisals, the land had a fair value of $204,600 and the building had a fair value of $105,400. On September 1, Tristar signed a $59,000 noninterest-bearing note to purchase equipment. The $59,000 payment is due on September 1, 2019. Assume that 8% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $4,400. On September 18, the company paid its lawyer $7,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $34,000 and $1,450 in freight charges also were paid. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $7,400 normal cash price. The supplier agreed to accept 200 shares of the company's nopar common stock in exchange for the equipment. The fair value of the stock is not readily determinable. On December 10, the company acquired a tract of land at a cost of $39,000. It paid $7,000 down and signed a 10% note with both principal and interest due in one year. Ten percent is an appropriate rate of interest for this note. Required: Prepare journal entries to record each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollars.)
Explanation / Answer
[Being equipment purchased ,PVF8%,1years*face value
.92593*59000=54630
Date Account dEBIT Credit sep1 Land [290000*204600/310000] 191400 Building 98600 cash 290000 [Total fair value 204600+105400] 1sep Equipment 54630 DIscount on note payable 4370 Note payable 59000[Being equipment purchased ,PVF8%,1years*face value
.92593*59000=54630
sep15 Truck 4400 DOnarion received 4400 [being donation given] sep18 organisation expense 7000 cash 7000 [Being organisational expense paid oct10 maintenance equipment 35450 cash 35450 [being equipment purchased 34000+1450]Related Questions
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